BT could go to war with Three at 4G auction

By Sooraj Shah
26 Jul 2012 View Comments

BT has given its biggest indication yet that it will bid for spectrum at the 4G auction scheduled for the end of the year.

Two days ago Ofcom announced its plans for the much-anticipated 4G auction, stating that it would reserve a minimum amount of spectrum for an operator other than O2, Vodafone and Everything Everywhere. It said that the fourth wholesaler of 4G services could be Hutchison Whampoa, which trades in the UK as Three, or "a new entrant altogether".

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In response, BT has told Computing that it could be interested in bidding at the auction.

"Ofcom's auction proposals are sufficiently flexible to cover our potential interests and we will continue to consider carefully as to whether we will participate in the award process," the telecoms giant said in a statement.

But while BT brought itself closer to the auction, Virgin Media distanced itself further from the process.

"We have been consistent in saying that we are not going to bid for large pieces of the spectrum and not looking to become a mobile operator. We have a good relationship with Everything Everywhere and this is ongoing so we stand to benefit from 4G services as a part of that relationship," a spokesperson told Computing.

The spokesperson explained that Virgin Media's ambition centres on wireless, and owning spectrum is "not a necessary requirement" of that, but did not completely rule out making a bid for the reserved spectrum.

Three, meanwhile, stated that it was "working through the detail of [Ofcom's] very substantial document to evaluate what it means for both consumers and competition in the UK mobile market".

An Ofcom spokesman explained that although there was spectrum reserved for a fourth operator, it could not guarantee that anyone would be able to meet the asking price.

"We are hoping there will be, and certainly we designed the auction in such a way to maximise the chances of that happening, but there is a possibility that it will not," he told Computing.

The spokesman then clarified how the bidding process would work for the fourth operator.

"If an operator meets the qualifying criteria and wants to bid for some of the reserve spectrum and it is not one of the big three operators (O2, Vodafone and Everything Everywhere) then it has to bid at the reserve price level. If it bids more than competing fourth operators (not the big three) for the reserved spectrum portfolio they are guaranteed to win the spectrum."

He confirmed that if there was not a fourth operator involved in the bidding process, the reserved spectrum would then be open to bids from the big three operators.

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